As a general rule, attorneys’ fees in the litigation context are payable by each litigant. While one may suspect foul play which results in a change in disposition of an Estate under a new Will or Trust, the person objecting to the change is obligated to pay his or her own attorneys’ fees until the conclusion of the matter, while an executor or trustee is able to use the funds held by an estate or trust to fund his or her fees. This puts anyone contesting a Will or Trust at a competitive disadvantage.
At the conclusion of the litigation, an application for reimbursement of one’s fees may be made out of the Estate. However, to the extent the contest was unsuccessful, the opportunity to recover one’s fees becomes less likely. In New Jersey, the Courts have found that so long as there is reasonable cause to contest the terms of a new Will or Trust, then reasonable fees may be awarded. This rule does not apply in new York, with a Court only likely to award fees in a successful contest.
This rule holds true for accounting actions, where a successful challenge to an estate or trust accounting will afford a litigant the opportunity for reimbursement of fees in the Court’s discretion.
Ultimately, an award of fees is left in the sound discretion of the Court, and a case must be properly evaluated before a challenge is filed.
Accounting Action – Denial of Attorneys’ Fees
In the Matter of the Estate of Lillian Schmidt, Deceased, 2012 N.J. Super. Unpub. ____ (Docket No.: A-0210-11T2) (App. Div. 2012). On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County. Before Judges Grall, Alvarez and Skillman.
Plaintiff appeals the denial of her request for counsel fees and from the lower Court’s approval of the accounting filed by Decedent’s attorney in fact.
Decedent was the aunt of Plaintiff and Defendant. Prior to her death, Decedent appointed her nephew, the Defendant, as her attorney in fact, and executed a Will leaving her entire estate to Defendant’s mother. Defendant’s mother predeceased the Decedent and therefore Defendant became Decedent’s sole beneficiary.
Plaintiff, a niece of the Decedent, filed suit requesting an accounting of Defendant’s actions under Decedent’s Power of Attorney and as administrator of her Estate. Plaintiff accepted the accounting as to the administration of the Estate but questioned Defendant’s conduct under the Power of Attorney. A trial ensued and the Court found that Defendant did not keep proper records and often made payments out to cash, but most of the funds were used for Decedent’s benefit. The Court ordered $8,036 which Defendant had yet to account for put back into Decedent’s account. Plaintiff then sought attorneys’ fees out of a fund in Court, which the Court denied, as Plaintiff’s application did not serve to create, protect or preserve the Estate as Defendant is the sole beneficiary.
The decision was upheld on appeal, with the Appellate Court finding that the lower Court made credibility determinations which were adequately supported by the record and that Plaintiff’s attorneys’ fees were properly denied as the Estate was not enhanced by years of litigation, as Defendant is the sole beneficiary of the Estate.
Legal Malpractice Action Filed Against Former Attorneys in a Will Contest Dismissed Based on Lack of Expert Testimony, and Attorneys’ Fees Upheld
John K. Walsh, Jr., Esq. and Walsh & Walsh, Esqs. v. Daniel Provenzano and Jo-Anne Olszewski, 2012 N.J. Super. Unpub. ____ (Docket No.: A-4043-10T1) (App. Div. 2012). On appeal from the Superior Court of New Jersey, Law Division, Bergen County. Before Judges A. A. Rodriguez, Sabatino and Ashrafi.
Defendants appeal from the trial Court’s dismissal of their legal malpractice Complaint filed against their former attorneys who represented them in an unsuccessful claim against the Estate of their deceased father.
In July 2005, Defendants met with and then hired Plaintiffs regarding their late father’s Estate. Plaintiffs prosecuted a claim on Defendants’ behalf and were paid $93,700 by Defendants during the Estate litigation pursuant to an executed retainer agreement. After an unsuccessful trial, Plaintiffs’ services were terminated. Plaintiffs then filed suit requesting that the additional fees owed by Defendants be paid. Defendants counterclaimed claiming legal malpractice, but did not produce an expert witness.
After holding a trial, the trial Court issued a judgment in Plaintiffs favor for the outstanding fees and dismissed Defendants’ claim of legal malpractice, as they failed to produce an expert witness on the issue of Plaintiffs’ alleged deviation from the standard of care. Defendants appealed, and the decision of the trial Court was affirmed on appeal.
In rendering its decision, the trial Court pointed to the fact that Plaintiffs made substantial payments on account pursuant to a written retainer agreement, were provided with detailed monthly statements and an accounting, and did not object to the requested fees until receiving an adverse judgment in the Estate litigation. Based on these facts, their opposition to the fee request was dismissed. Also, the fact that Plaintiffs failed to produce expert testimony on their legal malpractice claim rendered their counterclaim dismissible as a matter of law.
Denial of Legal Fees to Mother Seeking Guardianship and a Trust Over her Adult Son’s Inheritance
In the Matter of the Estate of Willie Booker, Deceased, 2012 N.J. Super. Unpub. ____ (Docket No.: A-0382-11T2) (App. Div. 2012). On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Essex County. Before Judges Cuff, Lihotz and St. John.
Willie Booker died intestate survived by an adult son, his sole heir. Decedent’s mother filed a verified Complaint seeking her appointment as administrator, creation of a special needs trust and appointment of trustee for her grandson, the sole heir. She filed another Verified Complaint seeking a medical and psychiatric evaluation of her grandson, a declaration of incapacity, and her appointment as guardian over his person and property.
Six months after filing the Complaints, Decedent’s mother fired her attorney and proceeded pro se. She also withdrew the guardianship action. Decedent’s mother sought legal fees from the Estate which were denied. The trial Court held that there was no basis to award counsel fees from the Estate, noting that the guardianship action was withdrawn, it was severely deficient on its face, and Decedent’s mother had not demonstrated how any of her actions aided in preservation or protection of the corpus of the estate. This decision was affirmed on appeal.
Will Contest – Attorneys’ Fees Capped by Court Based on Representations by Attorneys Prior to Settlement
In the Matter of the Estate of Halina Krzeminski, Deceased, 2012 N.J. Super. Unpub. ____ (Docket No.: A-3182-10T1) (App. Div. 2012). On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Ocean County. Before Judges A. A. Rodriquez and Ashrafi.
Attorney Joel Davies, Esq. appeals from the trial Court’s order denying his motion for reconsideration of the amount of attorney’s fees awarded to him following litigation of a contested will. Davies claims on appeal that the trial court improperly reduced his fee request based on an improper policy of capping the hourly rate charged by attorneys payable from an estate.
On appeal, although the Appellate Division agreed that a particular Judge’s policy of capping fees should not be a basis for an award of fees under R. 4:42-9, the Judge in this case did not abuse his discretion.
Decedent’s unexecuted Will was offered for probate and Davies represented potential beneficiaries. Settlement discussions were held between the parties and after hearing estimates on fees from the attorneys, the judge indicated that it was the policy of the Surrogate’s office to cap fees at $200 per hour. At the time, none of the attorneys objected, and Davies estimated his fees to be $50,000.
The parties then entered a settlement and a consent judgment was entered, with the Court authorizing the attorneys to submit Affidavits of Services to the Court for approval. Davies submitted an Affidavit seeking $92,155 based on an hourly rate of $350, an amount higher than the other attorneys. The Court awarded Davies a reduced amount of $52,988. Davies then filed a motion for reconsideration which was denied. In his oral decision, the Judge carefully reviewed the Affidavit of Services filed by Davies and considered the applicable standard of review. The Judge stated while he did not have a set policy of capping the rate at $200, it was his belief that the attorneys had consented to that rate at the time of settlement. Davies appealed.
In calculating an award of fees, the Court must determine the lodestar, the number of hours reasonably expended, multiplied by a reasonable hourly rate. This must be weighed against the specific circumstances and the recovery. Davies was paid 25% of the amount of his clients’ total recovery, and the hourly rate of $350 was higher than the remaining attorneys, who were agreeable to the $200 per hour cap on fees.
Although the trial court relied on the $200 cap, it was proper given the Court’s finding that the parties apparently agreed to the cap in settlement discussions. The award was upheld as fair and reasonable given these facts.
Will Contest – Denial of Attorneys’ Fees for Contesting Probate of a Copy of Decedent’s Will Without Reasonable Cause
In the Matter of the Alleged Will of Allan C. Schnecker, Deceased, 2012 N.J. Super. Unpub. ____ (Docket No.: A-5249-10T2) (App. Div. 2012). On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Monmouth County. Before Judges Waugh and St. John.
Plaintiff appeals from the trial Court’s denial of her request for attorneys’ fees. Plaintiff, a widow of the Decedent, contested the validity of a copy of Decedent’s Will which was offered for probate by Decedent’s daughter. After a trial, the trial Court found by clear and convincing evidence that the Decedent did not destroy or revoke his Will. The Court did not find Plaintiff’s testimony credible but Decedent’s testamentary intentions were adequately set forth in the copy of his Will offered for probate. The Court specifically relied on the fact that Plaintiff had called Decedent’s attorney, right after he died, asking where the Will was, so she assumed that there was a Will.
After the trial, Plaintiff sought attorneys’ fees from the Estate pursuant to R. 4:42-9(a)(3), claiming she had reasonable cause to contest the probate of Decedent’s Will. The Court disagreed, finding that Plaintiff had a weak case. This decision was affirmed on appeal as the trial Court’s findings were amply supported by credible proof, that the testimony offered by Plaintiff or on her behalf lacked credibility, was inadmissible or lacked probative value with respect to whether Decedent destroyed his Will. To satisfy the reasonable cause requirement for an award of fees, Plaintiff was required to provide the Court with a factual background reasonably justifying the inquiry as to the testamentary sufficiency of the instrument by the legal process. Instead, it was clear that Plaintiff possessed knowledge that the Will was not destroyed and simply failed to establish a factual background to justify her challenge.
Attorneys’ Fees – Sanctions for Bringing Frivolous Litigation
Estate of Claudia L. Cohen, et al. v. Cohen, 2010 N.J. Super. Unpub. ____ (Docket No.: BER-C-134-08) (Chan. Div. 2010). Before Judge Koblitz.
This opinion by the trial court involves the question of sanctions against the estate for engaging in frivolous litigation by filing and prosecuting an amended complaint with the frivolous allegation that defendant-father made an enforceable promise after 1978 to leave Decedent-daughter as much as her brother under his will. As a deterrent to discourage the estate from repeating the objectionable litigation strategy, an amount of $1.9 million in reasonable counsel fees and costs was awarded against the estate
Although an allowance of fees for bringing frivolous litigation is rare, and only when there is a clear showing of bad faith, the Court felt it warranted in this case in light of the previous ruling by the Court denying the claim. The court also cited the fact that estate assets were used to litigate the frivolous claim to the detriment of the beneficiary and was extremely destructive to the relationships between the beneficiary and her family.
Will Contest – Attorneys’ Fees will not be Assessed Against Assets that Pass by Operation of Law
In the Matter of the Estate of John Oliva, Jr., Deceased, 2011 N.J. Super. Unpub. ____ (Docket No.: A-2906-04T2) (App. Div. 2011). On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Atlantic County. Before Judges A. A. Rodriguez and Grall.
Executrix and sole beneficiary of the Estate appeal the lower court’s award of attorneys’ fees to decedent’s parents.
On September 22, 2002, decedent named McHugh as sole beneficiary of his estate under a holographic Will which he signed that day. Decedent killed himself 9 days later. Decedent’s parents filed a Will contest resulting in a settlement. Decedent’s parents then applied to the Court for an award of fees. The Court awarded them a portion of their fees. McHugh appealed, claiming that the award of fees was not proper. There was no finding of undue influence, and the only estate assets were life insurance and pension benefits that passed to McHugh by operation of law. McHugh argued that there was no fund and that any award should not be payable by her personally or out of the life insurance or pension proceeds which she received as beneficiary. The Appellate Division agreed, reversing the lower court’s award of fees.
R. 4:42-9(a)(2) permits an allowance of fees from a fund when it would be unfair to saddle the full cost upon a litigant who is in court to advance more than his own interest. Fees are also allowed under that Rule in a Will contest. However, the only assets of the estate were assets that passed by operation of law, and decedent’s parents failed to cite any authority as to why they should be included as probate assets in which an award of fees could attach.
Will Contest – Undue Influence Timing of Request for Legal Fees in Unsuccessful Will Contest
In the Matter of the Estate of Nancy L. Hermance, Deceased v. Brett Hermance, 2011 N.J. Super. Unpub. ____ (Docket No.: A-0907-10T4) (App. Div. 2011). On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Morris County. Before Judges Cuff and Simonelli.
In this probate action, defendant appeals from the lower court’s award of attorneys’ fees to his sister, who filed an unsuccessful will contest claiming undue influence. On appeal, defendant claimed that the application for fees was required to be made within twenty days of the entry of final judgment in the matter. In the case, the request for fees was made approximately two months after the entry of final judgment.
The lower court held that an application for fees may be filed within a reasonable time following entry of final judgment and the motion requesting fees in the matter, filed approximately two months after entry of final judgment, was reasonable under the circumstances. This was affirmed on appeal.
Will Contest – Undue Influence – Denial of Legal Fees
In the Matter of the Estate of Edward A. Cantor, Deceased, 2011 N.J. Super. Unpub. ____ (Docket No.: A-3819-08T2) (App. Div. 2011). On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Morris County. Before Judges Cuff, Sapp-Peterson and Simonelli.
Plaintiff, daughter of the Decedent, filed a Complaint claiming that certain family members and business associates of her father unduly influenced him to disinherit the Plaintiff. The lower court found no undue influence, but awarded her attorneys’ fees. On appeal, the Appellate Division affirmed the lower court’s finding that no undue influence occurred, but overturned the award of legal fees to the Plaintiff, as no reasonable cause existed to contest the Decedent’s estate plan.
Decedent died with an Estate of over $90 million. He was survived by his third wife and two children. Plaintiff was estranged from her father for many years due to litigation filed by the Plaintiff pertaining to five properties that Decedent had gifted to her. Her brother, the Defendant herein, tried to dissuade his sister from suing the Decedent, as he would disinherit her. Plaintiff went ahead with the law suit and Decedent indeed disinherited her. Plaintiff won the suit against the Decedent, who was ordered to pay her $1.5 million. Decedent ceased speaking to her, as did her brother.
Plaintiff sued Decedent civilly under the RICO statute, having him arrested. Decedent also kept a list of all the things his daughter did to him over the years, and read it just prior to his death, claiming that he would not change his Will. Decedent executed consecutive Wills in April of 1991, another one several months later, and another Will in September of 1997, all disinheriting his daughter. On June 16, 1999, Decedent executed another Will, naming his son as the sole residuary beneficiary, stating that he made no provision for his daughter. The signing was taped, and Decedent expressed his clear intentions to disinherit her. Decedent’s son had nothing to do with the Will and did not attend the signing.
Plaintiff claims that she reunited with Decedent in 2000. Decedent’s attorney testified that despite some meetings between Decedent and his daughter, Decedent clearly intended to disinherit her. He also testified that Decedent was strong willed until the end and that there were never any signs of influence by anyone over the Decedent. Decedent signed a Codicil in October of 2000 reaffirming his intention to disinherit his daughter. His health was deteriorating but not his mental state, and on April 6, 2001, signed his final Will, again disinheriting his daughter.
Decedent died in 2002 and Plaintiff brought suit. Relying on the strength of the testimony, the contents of Decedent’s Wills, and the fact that Decedent remained strong-willed until the end, still going into work, the lower court held that no undue influence occurred, but awarded fees. On appeal, the appellate court upheld the dismissal of the Complaint but overturned the award of fees, finding Plaintiff had no reasonable cause to contest the Will. Decedent’s intentions were clear. Plaintiff had nothing more than “hope” that the examination of witnesses would uncover some wrongdoing, and that is not enough to satisfy the reasonable cause standard in awarding fees.
Will Contest – Undue Influence, Testamentary Capacity, Award of Legal Fees
In the Matter of the Estate of Blanche T. Riordan, Deceased, 2011 N.J. Super. Unpub. ____ (Docket No.: A-3819-08T2) (App. Div. 2011). On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Monmouth County. Before Judges Parrillo, Skillman, and Roe.
Plaintiffs, nieces and nephews of the Decedent, appeal from a judgment from the Chancery Division concluding that decedent had testamentary capacity when she signed her will and that the will was not the product of undue influence. The trial court awarded a portion of the legal fees incurred by plaintiffs’ counsel, which was also appealed. The Appellate Division upheld the trial court’s decision, finding adequate proof to sustain their judgment.
Decedent died in June of 2006 at the age of 91. She was survived by her brother and some nieces and nephews. Decedent’s will bequeathed $25,000 to a nephew and the remainder of her estate to her surviving brother’s three children. The will, a holographic will, was drawn by the decedent in the presence of her brother, while her brother’s children, the residuary beneficiaries under the will, waited in another room of decedent’s house. After she drew the will, decedent was brought to her bank, and her niece and nephew acted as witnesses and a notary at the bank notarized the document. Decedent’s nephew, who only received $25,000 under the will, filed a complaint seeking to set it aside.
Plaintiff introduced evidence showing that decedent had fractured her back just before she signed the will, and was confused at times. Decedent’s niece, who witnessed the will and was also a residuary beneficiary, shared a confidential relationship with the decedent. With the assistance of decedent’s close friends, who testified that although decedent was frail, she was strong willed and was able to make her own decisions at the time she made the will. Decedent also visited her home in Florida, by herself, after she made the will out. There was also testimony that decedent adored the residuary beneficiaries. After hearing the testimony, the trial court found that although a confidential relationship existed, the defendants were successful in rebutting this presumption. There was no evidence that defendant overpowered the decedent. In light of the testimony regarding decedent’s health, and the fact that NJ law requires only a very low degree of mental capacity to execute a will, the trial court held that decedent had testamentary capacity at the time she made out the will. The trial court then awarded legal fees, reducing same, in its discretion, based on the ultimate outcome of the case as well as the size of the estate. This opinion was upheld on appeal as the Appellate Division believed that there was sufficient evidence to support the trial court’s conclusions.
In re Estate of Richard Newberry, 2010 N.J. Super. Unpub. LEXIS 642 (Docket No. A-1332-08T1) (App. Div. 2010). On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Middlesex County. Before Judges Rodriguez and Reisner.
Plaintiff sought review of the Court’s award of legal fees from the Estate, despite having been given the right to object to the fees in a prior action.
The Court found that the failure of the plaintiff beneficiary to object to the request for fees and costs of suit, and the consent to entry of an order awarding such fees, barred the plaintiff beneficiary from seeking further review of the matter.
Initially, Decedent’s accountant sought probate of an unsigned copy of a Will prepared on Decedent’s behalf. The Court originally probated the Will, despite the fact that it was unsigned. Cousins of the Decedent filed a complaint objecting to the probate and after reconsidering its determination, the Court changed its prior ruling and refused admission of the Will to probate. An application was made by the Decedent’s accountant and her attorney for fees, and the Court awarded same with the Consent of all interested parties. An accounting was subsequently approved by counsel for the plaintiff beneficiary detailing these fees. Plaintiff beneficiary failed to object, failed to file an appeal or a motion for reconsideration. Several months later, plaintiff beneficiary filed a complaint seeking relief against Decedent’s accountant for wrongdoing and to disallow her fees. The Court dismissed the action as time barred as the claims were not raised in the initial probate action. The Appellate Court affirmed.
Sanctions for Frivolous Litigation
In the Matter of the Estate of Andrell Cyrano “Billy” Adams, deceased, 2010 N.J. Super. Unpub. _____ (Docket No. A-5764-08T2) (App. Div. 2010). On appeal from the Superior Court of New Jersey, Law Division, Bergen County. Before Judges Skillman, Gilroy and Simonelli.
This appeal involves the propriety of the trial court’s order directing the law firm for the Decedent’s ex-wife to pay Rule. 1:4-8 counsel fee sanctions for filing a frivolous motion.
The underlying matter arises out of questions over the appointment of a friend of the family as administratrix of Decedent’s estate. Decedent died intestate survived by his ex-wife and 4 children, two of which were from different relationships. On application of some of Decedent’s children, the friend of the family was appointed as administratrix. The law firm later filed suit seeking to have Decedent’s ex-wife appointed as administratrix claiming negligence by her prior attorneys. The court concluded that there was a conflict in appointing Decedent’s ex-wife, who still owed the estate money under the judgment of divorce, and that the existing administratrix was properly fulfilling her duties, and denied the motion. The court denied the application for sanctions against the law firm, stating that if Decedent’s ex-wife failed to cooperate with the estate, it would be viewed in a different light. The law firm then filed a motion for reconsideration on behalf of the daughter of Decedent’s ex-wife, and sanctions under Rule 1:4-8 were imposed.
On appeal, the court reversed, finding that the law firm filed the reconsideration motion in good faith, as the law firm believed the court failed to address the issue of whether there were grounds to vacate the original appointment under Rule 4:50-1(f) before considering a replacement. The law firm reasonably inferred that the denial of their motion was based on the conflict of interest between the Decedent’s ex-wife and the estate. The required safe harbor notice requesting the law firm to withdraw the motion was also never sent.
Legal Fees – Administration
In re Probate of the Holographic Will of Robert Murray, deceased, 2009 N.J. Super. Unpub. LEXIS 1157 (Docket No. A-3775-07T1) (2009). Before Judges Carchman, R.B. Coleman and Simonelli.
Issue: Was the Court’s grant of attorneys’ fees to the temporary administrator’s law firm an abuse of discretion?
Holding: No. The legal fee award to the temporary administrator was affirmed as the lower Court did not abuse its discretion.
This case involved a Will contest over a holographic Will. The Court appointed a New Jersey attorney as temporary administrator, and ordered the sale of Decedent’s sole asset, a condominium, to pay down Decedent’s debts. Numerous objections to the sale of the condominium and exceptions to the accounting were filed by the beneficiaries. The issue under appeal dealt solely with the award of legal fees to the temporary administrator by the Court.
The Court found that the estate required the temporary administrator’s legal expertise due to the nature and complexity of the problems the estate faced, including the constant objections from the beneficiaries. The time spent and hourly rate were reasonable under the circumstances and the Court award was therefore affirmed on appeal.
Legal Fees – Will Contest
In re Estate of Richard Riley, 2009 N.J. Super. Unpub. LEXIS 2692 (Docket No.: A-1957-08T3) (App. Div. 2009). Before Judges Cuff and Waugh.
Issue: Was the award of legal fees to the unsuccessful proponents in a Will contest proper under the circumstances?
Holding: Yes, the award of fees was affirmed. Fee determinations by trial Courts will be disturbed only on the rarest of occasions, and then only because of a clear abuse of discretion. In this matter, the probate Court awarded fees to the unsuccessful proponents of a codicil of Decedent, and an appeal was filed. After a review of the record, the Court concluded there was no abuse of discretion in awarding fees. The matter was remanded to determine who funded the litigation, the proponents or a third party, and to determine whether the attorney for the proponents had received the total amount of the Court’s award of legal fees.